Wire Fraud

Wire fraud is defined as an act of fraud using electronic communication. This electronic communication can be via wire, radio, or television. The Supreme Court has held several times that the wire fraud statute has a long arm, extending to 'everything designed to defraud by representations as to the past or present, or suggestions and promises as to the future. However, the Supreme Court has also noted that an incautious reading of the wire fraud statute could dramatically expand the reach of federal criminal law and has made some efforts to constrict the applicability of the statute. Essentially, there is some recognition by the Supreme Court that given the statute's broad applicability, "a sweeping expansion of federal criminal jurisdiction in the absence of a clear statement by Congress" is discouraged. Despite the Court's warnings, however, the wire fraud statute has been applied to a wide range of activities.

18 U.S.C. § 1343 makes it a crime for anyone to use interstate wire communications facilities in carrying out a scheme to defraud. In order to convict the government must prove each of the following beyond a reasonable doubt:

That the individual charged knowingly created a scheme to defraud;

That the individual acted with an specific intent to defraud;

That the individual used interstate wire communications facilities or caused another person to use interstate wire communications facilities for the purpose of carrying out the scheme;

That the scheme to defraud employed false material representations; and

That the scheme affected a financial institution or was in connection with the conduct of telemarketing.

The possible punishment for wire fraud is a fine or imprisonment for not more than twenty years, or both. If the violation affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.

A "scheme to defraud" includes any scheme to deprive another of money, property, or of the intangible right to honest services by means of false or fraudulent pretenses, representations, or promises. An "intent to defraud" means an intent to deceive or cheat someone. A representation is "false" if it is known to be untrue or is made with reckless indifference as to its truth or falsity. A representation would also be "false" when it constitutes a partial truth, or effectively omits or conceals a material fact, provided it is made with intent to defraud. A false statement is "material" if it has a natural tendency to influence, or is capable of influencing, the decision of the person or entity to which it is addressed.

It is not necessary that the government prove all of the details concerning the precise nature and purpose of the scheme, or that the material transmitted by wire was itself false or fraudulent, or that the alleged scheme actually succeeded in defrauding anyone, or that the use of interstate wire communications facilities was intended as the specific or exclusive means of accomplishing the alleged fraud. What must be proved beyond a reasonable doubt is that the individual charged knowingly devised or intended to devise a scheme to defraud and that the use of the interstate wire communications were closely related to the scheme because the individual either wired something or caused it to be wired in interstate commerce in an attempt to execute or carry out the scheme. To "cause" interstate wire communications facilities to be used is to do an act with knowledge that the use of the wire facilities will follow in the ordinary course of business or where such use can reasonably be foreseen.

Each separate use of the interstate wire communications facilities in furtherance of a scheme to defraud constitutes a separate offense. Once membership in a scheme to defraud is established, a knowing participant is liable for any wire communication that subsequently takes place or that previously took place in connection with the scheme.